The adult external sense organ precursor (SOP) lineage is a model system for studying asymmetric cell division. Adult SOPs divide asymmetrically to produce IIa and IIb daughter cells; IIa generates the external socket (tormogen) and hair (trichogen) cells, while IIb generates the internal neuron and sheath (thecogen) cells. Here we investigate the expression and function of prospero in the adult SOP lineage. Although Prospero is asymmetrically localized in embryonic SOP lineage, this is not observed in the adult SOP lineage: Prospero is first detected in the IIb nucleus and, during IIb division, it is cytoplasmic and inherited by both neuron and sheath cells. Subsequently, Prospero is downregulated in the neuron but maintained in the sheath cell. Loss of prospero function leads to 'double bristle' sense organs (reflecting a IIb-to-IIa transformation) or 'single bristle' sense organs with abnormal neuronal differentiation (reflecting defective IIb development). Conversely, ectopic prospero expression results in duplicate neurons and sheath cells and a complete absence of hair/socket cells (reflecting a IIa-to-IIb transformation). We conclude that (1) despite the absence of asymmetric protein localization, prospero expression is restricted to the IIb cell but not its IIa sibling, (2) prospero promotes IIb cell fate and inhibits IIa cell fate, and (3) prospero is required for proper axon and dendrite morphology of the neuron derived from the IIb cell. Thus, prospero plays a fundamental role in establishing binary IIa/IIb sibling cell fates without being asymmetrically localized during SOP division. Finally, in contrast to previous studies, we find that the IIb cell divides prior to the IIa cell in the SOP lineage.